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Medicare: High-Expenditure Part B Drugs
James C. Cosgrove (au)
In 2010, the Medicare program and its beneficiaries spent about $19.5 billion on Part B drugs -- drugs that are commonly administered by a physician or under a physician's close supervision in physicians' offices and hospital outpatient departments. Some of these drugs are very expensive for Medicare, either because they are used by a large number of beneficiaries or because their prices are high. These drugs generally differ from drugs beneficiaries obtain through Medicare Part D, which are usually self-administered and for which Medicare, its beneficiaries, and the states spent $61.7 billion in 2010. Medicare bases its payments for most Part B drugs on the average sales price (ASP), which is calculated from data that manufacturers report quarterly to the Centers for Medicare & Medicaid Services (CMS). ASP is the average price, after rebates and discounts, of all sales of a specified drug in the U.S.; consequently, Medicare's payment rates for Part B drugs are based on prices set by the private market. This report examines (1) the Part B drugs for which Medicare expenditures were highest in 2010 and the utilization and spending trends for these high-expenditure Part B drugs from 2008 to 2010; and (2) nationwide spending levels for the total U.S. population for these high-expenditure Part B drugs in 2010 and Medicare's percentage of total U.S. spending. Tables and figures. This is a print on demand report.
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